Ears of wheat in a field near Melitopol, in the Zaporizhia region, Ukraine. The conflict in Ukraine has affected the availability and price of wheat around the world.
The war between Russia and Ukraine, which began on February 24, has given a strong impetus to the increase in the price of raw materials and has had an impact, in turn, on the level of inflation in many countries, including Argentina. .
This argument has since then become the best explanation by the Government, as to why inflation at the local level remains so high, especially for food, the item with the greatest weight in the Consumer Price Index (CPI). ). ).
But To what extent this level of increase – which one accumulates a 60.7% increase annual- obey the convulsive world economy?
Particularly in the food sector, “the increase in international prices continues to have an impact,” warns Hernán Letcher, economist at the Center for Argentine Political Economy (CEPA). “If we take the data published by FAO as a reference, the values are really significant: 12% since the start of the war. If from this value we wanted to approximate the local inflationary pressure, and considering that the official exchange rate moved between March and May by about 11%, the value of the external shock would reach 24%. While the evolution of food prices reached an average of 33.7% “, He says.
This problem may include in particular that relating to derivative products wheat and oils. “This adds to the internal scenario, which is no less complex,” said the analyst. Taking just the trend in food prices in May, they increased by 4.4%. “Half is explained by products that are not related to raw materials and increased by 3.6% e the other half for products related to wheat, corn, sunflower, which grew by 5.5%.”, Explains the analyst. “That is, we might think that, without conflict, commodity-related products shouldn’t have increased by more than 3.6%.”
Regarding the impact of the conflict on general inflation, economist Gabriel Rubinstein states: “one can roughly consider that of the 70% inflation (low for this year) that we are projecting, 15 points could have to do directly with the war in Ukraine. This is due to the increases in food and energy resulting from the war. The rest, the other 55%, is explained by fiscal and monetary policy, “she said.
According to Juan Pablo Ronderos, an economist at the consultancy Map Economic & Business Advisors, one of the companies provides its inflation forecasts to the Central Bank, the dynamics of inflation in Argentina have a life of their own. “What the Russian invasion may have done is create more noise. Not only due to the increase in commodities and the lower availability of products, but also because they have generated a worsening of economic expectations, due to a possible devaluation Of weight. This means that this expectation is reflected in the prices, ”he adds.
Along the same lines, Federico Furiase, director of Anker Latin America, states that the Russian-Ukrainian war “is part of the film: the most complicated thing is that we have profound inflationary inertiaan absence of effective anchors to bring it down quickly, a very deteriorated central bank balance sheet (BCRA) and a relative adjustment of prices in advance (especially in rates) that will continue to put pressure on inflationary inertia, “he said.
As part of that film, the International Monetary Fund anticipated that the organization intends to analyze the quarterly objectives of the agreement with Argentina and that this will include a revision of the inflation estimate, given the rise in international prices resulting from the conflict.
Natalia Muscatelli
Source: Clarin
